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December 31, 2012

Top 10 Forex Events Outlook: Dec. 31-Jan. 4

Dec. 31, 2012 (Allthingsforex.com) – Economic data from both sides of
the Atlantic, culminating with the U.S. Non-Farm Payrolls and
Employment Situation report, will kick-start the first trading week of
2013 as investors hope for a last minute “fiscal cliff” solution and
look for signs of consistent improvement in the U.S. labor market.

In preparation for the new trading week, here is the outlook for the
Top 10 spotlight economic events that will move the markets around the
globe.

With the four-week average at a four and a half year low of 356,750,
the U.S. jobless claims are forecast to stay in line with the recent
trend of improvement, despite of an anticipated slight increase to 356K
from 350K in the previous week.

The minutes from the Federal Open Markets Committee meeting will be
likely to reassure the markets of the central bank’s commitment to stay
the QE course despite of the firmer economy. The report could weigh on
the USD as the minutes offer a reminder that the Fed’s open-ended
quantitative easing is bound to continue.

Inflationary pressures in the euro-area are forecast to subside
further to 2.1% y/y in December from 2.2% y/y in November. With the
inflation gauge approaching the European Central Bank’s 2% target,
inflation is not going to be an obstacle to further monetary policy
easing, including a potential rate cut, if conditions in the euro-zone
economy continue to deteriorate.

After the “blockbuster” 59,300 new jobs added to the economy in
November, job creation in Canada is expected to cool off with only 1,000
jobs in December. The unemployment rate is forecast to inch higher to
7.3% in December from 7.2% in the previous month.

The trend of improvement in the U.S. labor market is expected to
continue with another decent Non-Farm Payrolls report as the U.S.
economy adds 145K jobs in December compared with 146K in November, while
the unemployment rate stays unchanged at 7.7%. With unemployment still
far from the Fed's recently announced 6.5% target, the greenback could
come under pressure if the NFP report improves investor sentiment and
reminds the markets that the U.S. central bank's aggressive QE is here
to stay.